Proposed Rule: OSC Rule - 35-501 - Registration of Non-Residents
Proposed Rule: OSC Rule - 35-501 - Registration of Non-Residents
NOTICE OF PROPOSED RULE 35-501
REGISTRATION OF NON-RESIDENTS
Substance and Purpose of Proposed Rule
The substance and purpose of the proposed Rule are first to set out the residency requirements applicable to aperson or company who wishes to register as a dealer under the Securities Act (Ontario) (the "Act") or who wishesto register as a salesperson or as an officer or partner of a dealer registered under the Act; second, to providecertain Canadian dealers with an exemption from these residency requirements in order to facilitate registration inOntario by dealers registered in another province or territory of Canada; and, third, to provide the salespersons,officers or partners of certain United States of America (the "U.S.A.") broker-dealers with an exemption from theseresidency requirements in order to facilitate cross-border trading by salespersons or officers or partners of thoseU.S.A. broker-dealers that are affiliates of a person or company registered as a broker or investment dealer underthe Act.
The proposed Rule is a reformulation of OSC Policy Statement No. 4.7 ("Policy 4.7"), as well as the Staff Notice ofChange in Administrative Practice Regarding Registration Residency Requirements for Certain Canadian ResidentDealers (1995), 18 OSCB 3908 (the "First Staff Notice") and the Staff Notice of Change in Administrative PolicyRegarding Residency Requirements for Certain Non-Resident Salespersons and Supervisors (1995), 18 OSCB3905 (the "Second Staff Notice").
Summary of Proposed Rule
Section 2.1 of the proposed Rule imposes an Ontario residency requirement upon each person or companyapplying for registration as a dealer under the Act, other than those persons or companies that are applying forregistration as dealers in the category of international dealer or security issuer, for which there are no residencyrequirements, or limited market dealer, for which there is a Canadian residency requirement imposed by section 2.2of the proposed Rule.
Section 2.3 of the proposed Rule provides an exemption from the Ontario residency requirement imposed bysection 2.1 for a person or company applying for registration as a dealer if the person or company has a place ofbusiness in a province or territory of Canada other than Ontario and the person or company is a member of a self-regulatory organization and is registered under the securities legislation of that province or territory.
Section 3.1 of the proposed Rule imposes residency requirements upon individuals applying to be registered assalespersons, or as officers or partners, of a registered dealer (other than international dealers or security issuers).Those individuals must either be ordinarily resident in Ontario, or ordinarily resident in another province or territoryof Canada and registered under the securities legislation of that province of territory.
An exemption from this requirement is provided by section 3.2 of the proposed Rule for individuals not ordinarilyresident in a jurisdiction if the individual is registered as a salesperson with, or an officer or partner of, a U.S.A.broker or dealer (the "U.S. registrant") that is registered under the Act as an international dealer and that hasentered into a written agreement with a person or company that is registered under the Act as a dealer in thecategory of broker or investment dealer (the "Ontario supervising dealer"). In such circumstances, both the U.S.registrant and the Ontario supervising dealer must jointly supervise the trading activities of any salesperson, officeror partner of the U.S. registrant, in accordance with the provisions of the written agreement, and all trading activitywith Ontario residents must be done on behalf of the Ontario supervising dealer.
Part 4 of the proposed Rule imposes a requirement on each person or entity applying for registration as a dealer oradviser under the Act that does not have a place of business in Ontario, and upon each individual applying forregistration as a salesperson or as an officer or partner of a registered dealer or adviser that is not ordinarilyresident in Ontario, as a condition of registration, that a Submission to Jurisdiction and Appointment of Agent forService of Process form be filed with the Commission. The form to be used by dealers or advisers is set out asAppendix A to the proposed Rule and the form to be used by salespersons, officers or partners is set out asAppendix B. Disclosure of the name and address of the agent for service of process appointed by a registereddealer is required to be made in each prospectus, registration statement, offering memorandum or similar offeringdocument in which the registered dealer is acting as an underwriter, and in writing to each of a dealer's or adviser'sOntario clients.
Part 5 of the proposed Rule permits the Director to grant an exemption to the proposed Rule, in whole or in part,subject to such conditions or restrictions as may be imposed in the exemption.
The Appendices to the Rule set out the Submission to Jurisdiction and Appointment of Agent for Service of Processforms for non-resident dealers and for their salespersons, officers and partners.
Background
The general practice of the Commission, adopted as an administrative matter by the Director, has generally been torequire all dealers registered under the Act, other than international dealers and limited market dealers, to maintainan office and a trading officer in Ontario. No residency requirements have been imposed upon internationaldealers, while limited market dealers have been required only to maintain an office and a trading officer in Canada.These requirements are now set out in sections 2.1 and 2.2 of the proposed Rule.
In 1995, Staff of the Commission issued the First Staff Notice, which reflected the willingness of the Director topermit a person or company (an "applicant") to become registered as a dealer under the Act, notwithstanding thatthe applicant did not have a place of business in Ontario and did not employ an Ontario resident trading officer, ifthe applicant had a place of business in another province or territory of Canada and was a registrant under thesecurities legislation of that province or territory. Section 2.3 of the proposed Rule reflects this provision of the FirstStaff Notice.
The First Staff Notice also required the applicant to file a duly executed Submission to Jurisdiction and Appointmentof Agent for Service of Process form, both for itself and for its officers or partners, with the Commission. Thisrequirement is now found as section 4.1(a) of the proposed Rule, and it applies to all persons or companiesapplying for registration under the Act who do not have a place of business in, or are not ordinarily resident in,Ontario. Applicants were also required by the First Staff Notice to make certain disclosure of the agent for servicethat they appointed, and this requirement is found as paragraph 4.1(b) of the proposed Rule.
The First Staff Notice also required the applicant to notify the Commission of any suspension, cancellation,revocation or non-renewal of its registration in the other Canadian jurisdiction, of the imposition of any new termsand conditions or that registration or of any investigation or disciplinary action by a regulatory body. The proposedRule does not contain this requirement, as this matter will be dealt with in proposed Rule 33-503 Change ofRegistration Information.
The Director has generally exercised his or her discretion to require all salespersons, officers and partners ofregistered dealers (other than international dealers or security issuers) to be residents of Ontario. This requirementis found as paragraph 3.1(a) of the proposed Rule.
The two exceptions to this Ontario residency requirement for individuals have been provided by Policy 4.7, adoptedby the Commission in 1982, and the Second Staff Notice, issued in 1995.
Policy 4.7 permitted an individual who was a resident of a province or territory of Canada other than Ontario toregister as a salesperson or as a partner or officer of a dealer registered under the Act, if the salesperson wasregistered under the securities legislation of his or her jurisdiction of residence. This exception to the Ontarioresidency requirements for salespersons of registered dealers is found as paragraph 3.1(b) of the proposed Rule.
Certain aspects of Policy 4.7 have not been reflected in the proposed Rule. Policy 4.7 required the registration ofthe dealer under the Act and the registration of the individual under the securities legislation of his or her jurisdictionof residence to each be in good standing. This requirement has not been included in the proposed Rule, as theCommission and other Canadian securities administrators do not certify that a registration is in good standing.Also, the dealer employing the individual applicant was required by Policy 4.7 to be the exclusive employer of theapplicant. This requirement has not been reflected in the proposed Rule, as Staff of the Commission are of theview that the securities legislation of the applicant's province of residence ought to determine whether theapplicant's employment with the dealer must be exclusive. Finally, the applicant was required by Policy 4.7 to havepassed the requisite educational course with a grade of 70% or more. This requirement has not been included inthe proposed Rule, as Staff are of the view that successful completion of the required course should be sufficient topermit registration.
The Second Staff Notice waived any Ontario or Canadian residency requirements for individual salespersons orofficers or partners of a broker or dealer registered in the U.S.A., which is registered under the Act as aninternational dealer, and which has an affiliate in Ontario that is registered under the Act as a broker or investmentdealer. In those circumstances, a non-Canadian salesperson or officer or partner of such a U.S.A. broker or dealercould become registered in Ontario in order to trade in any type of security with clients who are resident in Ontario.This exception to the residency requirements is found as section 3.2 of the proposed Rule. There is no longer arequirement that the U.S. registrant have an Ontario affiliate, however, so long as the U.S. registrant has enteredinto a written agreement with an Ontario registrant registered in the category of broker or investment dealer (an"Ontario supervising dealer") which provides for the Ontario supervising dealer to supervise the trading activities ofthe salespersons, officers or partners of the U.S. registrant with customers ordinarily resident in Ontario.
Any trading activities undertaken with clients ordinarily resident in Ontario must be done on behalf of the Ontariosupervising dealer. Accordingly, the Ontario supervising dealer will be responsible for all such trading activities,with the result that certain of the provisions of the Second Staff Notice (namely, that the Ontario affiliate wasrequired to be responsible for ensuring that Canadian Investor Protection Fund contributions were made for tradesin securities in Ontario made by the non-resident salesperson or officer or partner, for the maintenance ofappropriate books and records, for the extension of credit to customers of the Ontario affiliate who are ordinarilyresident in Ontario, for the safekeeping of the assets of customers of the Ontario affiliate who are ordinarily residentin Ontario and for the issuance of all confirmations and statements required to be sent to customers ordinarilyresident in Ontario) are redundant and have not been included in the proposed Rule.
Authority for the Proposed Rule
The following provisions of the Act provide the Commission with the authority to make the proposed Rule.Paragraph 143(1)1 of the Act authorizes the Commission to make rules prescribing requirements in respect ofapplications for registration and the renewal, amendment, expiration or surrender of registration and in respect ofsuspension, cancellation or reinstatement of registration. Paragraph 143(1)4 of the Act authorizes the Commissionto make rules prescribing requirements in respect of the residence in Ontario or Canada of registrants. Paragraph143(1)7 of the Act authorizes the Commission to make rules regarding the disclosure or furnishing of information tothe public or the Commission by registrants. Paragraph 143(1)8 of the Act authorizes the Commission to makerules providing for exemptions from the registration requirements under the Act or for the removal of exemptionsfrom those requirements. Paragraph 143(1)10 of the Act authorizes the Commission to make rules prescribingrequirements in respect of the books, records and other documents required by subsection 19(1) of the Act to bekept by market participants, including the form in which and the period for which the books, records and documentsare to be kept.
Unpublished Materials
In proposing the Rule, the Commission has not relied on any significant unpublished study, report or other writtenmaterials.
Alternatives Considered
The Commission has determined that it is appropriate that its administrative practices and policies regardingresidency requirements be set forth in a rule, and that the relief provided by Policy 4.7, the First Staff Notice andSecond Staff Notice should continue to be available. The alternative methods of achieving this result would involvean amendment to the Act; however, this alternative is not considered appropriate at this time.
Anticipated Costs and Benefits
It is anticipated that Canadian SRO member dealers will benefit from the proposed Rule in that they will not berequired to open and maintain an office in Ontario, thus reducing their costs of operation. It is also anticipated thatthe proposed Rule will provide similar cost benefits to U.S.A. broker-dealers and their salespersons, officers andpartners having Canadian affiliates by permitting them to engage in certain cross-border trading activities withindividuals from the U.S.A. The costs of compliance with the requirements of the proposed Rule are not expectedto be significant.
Specific Request for Comments
In addition to welcoming submissions on any provision of the proposed Rule, the Commission specifically seekscomment on the imposition in the proposed Rule of certain residency requirements, in light of the followingcomments contained (at page 141) in Change, Challenge and Opportunity, The Report of the Task Force on theFuture of the Canadian Financial Services Sector published September 14, 1998:
Finally, we have noted that in some provinces occupational and residence restrictions limit the ability to offercertain financial services products within the province. Some of these restrictions, for example, preventemployees of deposit-taking institutions from qualifying for a licence to sell insurance. Others requireindividuals to be employed full-time in dealing with a particular type of product or service. Residencerequirements sometimes prevent residents of a province from being served from a call centre outside theprovince. In a world where work patterns, attitudes and even definitions about part-time work are shiftingrapidly, where technology is increasingly making borders less relevant to selling practices, and where we arerecommending that deposit-taking institutions be able to retail insurance products, these restrictions areanachronistic and constitute undesirable barriers to trade. We urge provincial governments to remove them.
Comments
Interested parties are invited to make written submissions with respect to the proposed Rule. Submissions receivedby December 31, 1998 will be considered.
Submissions should be made to the Commission in duplicate, as indicated below:c/o Daniel P. Iggers, Secretary
Ontario Securities Commission
20 Queen Street West
Suite 800, Box 55
Toronto, Ontario M5H 3S8
A diskette containing the submissions (in DOS or Windows format, preferably Wordperfect) should also besubmitted. As Ontario securities legislation requires that a summary of written comments received during thecomment period be published, confidentiality of submissions cannot be maintained.
Questions may be referred to either of the following:
Randee Pavalow
Policy Co-ordinator/Advisor
Ontario Securities Commission
(416) 593-8257
Nancy Ross
Legal Advisor, Market Operations - Registration
Ontario Securities Commission
(416) 593-8154
Proposed Rule
The text of the proposed Rule follows, together with footnotes that are not part of the Rule but have been included toprovide background and explanation.
Dated: October 2, 1998.
REGISTRATION OF NON-RESIDENTS
TABLE OF CONTENTS
PART TITLEPART 1 DEFINITIONS
1.1 Definitions
PART 2 RESIDENCY REQUIREMENTS FOR DEALERS
2.1 Residency Requirements for Certain Dealers
2.2 Residency Requirements for Limited Market Dealers
2.3 Exemption for Certain Canadian Dealers
PART 3 RESIDENCY REQUIREMENTS FOR SALESPERSONS AND REGISTERED OFFICERS ANDPARTNERS OF REGISTERED DEALERS
3.1 Residency Requirements for Salespersons, Officers and Partners
3.2 Exemption for Salespersons, Officers and Partners of Certain U.S. Dealers
PART 4 SUBMISSION TO JURISDICTION BY NON-RESIDENTS OF ONTARIO
4.1 Submission to Jurisdiction
4.2 Disclosure of Agent for Service of Process
PART 5 EXEMPTION
5.1 Exemption
PART 1 DEFINITIONS(2)
1.1 Definitions - In this Rule
"broker-dealer" means a "broker" or a "dealer", as those terms are defined in the 1934 Act(3), that has itsprincipal place of business in the United States of America and that is an international dealer;
"Ontario supervising dealer" means a broker(5) or investment dealer(6) that has entered into a writtenagreement with a broker-dealer providing for the supervision by the Ontario supervising dealer of thedealings by a salesperson or by an officer or partner of the broker-dealer with customers ordinarily residentin Ontario; and
"submission to jurisdiction and appointment of agent for service of process form" means, for a non-resident dealer or adviser, the form set out in Appendix A to this Rule and, for a non-resident salesperson,officer or partner of a non-resident dealer or adviser, the form set out in Appendix B to this Rule.
PART 2 RESIDENCY REQUIREMENTS FOR DEALERS
2.1 Residency Requirements for Certain Dealers - Subject to section 2.3, a person or company shall notapply for registration under the Act as a dealer, other than as a limited market dealer(7), a security issuer(8) oran international dealer, unless the person or company has a place of business in Ontario and has at leastone individual employed by it who is ordinarily resident in Ontario and who contemporaneously applies forregistration as an officer or partner of the person or company.
2.2 Residency Requirements for Limited Market Dealers - A person or company shall not apply forregistration under the Act as a limited market dealer unless the person or company has a place ofbusiness in any jurisdiction(9) and has at least one individual employed by it who is ordinarily resident in ajurisdiction and who contemporaneously applies for registration as an officer or partner of the person orcompany.
2.3 Exemption for Certain Canadian Dealers(10) - Despite section 2.1, a person or company that is a memberof an SRO(11), that does not meet the requirements of section 2.1 and that applies for registration as adealer may, if the Director is otherwise satisfied(12), be registered if the person or company has a place ofbusiness in a jurisdiction other than Ontario and is registered under the Canadian securities legislation(13) ofthe jurisdiction.
PART 3 RESIDENCY REQUIREMENTS FOR SALESPERSONS AND REGISTERED OFFICERS ANDPARTNERS OF REGISTERED DEALERS
3.1 Residency Requirements for Salespersons, Officers and Partners - Subject to section 3.2, anindividual shall not apply for registration as a salesperson, officer or partner of a dealer registered underthe Act, other than as a salesperson, officer or partner of an international dealer or a security issuer,unless the individual is
(a) ordinarily resident in Ontario; or
(b) ordinarily resident in a jurisdiction other than Ontario and registered under the securities legislation ofthe jurisdiction.(14)
3.2 Exemption for Salespersons, Officers and Partners of Certain U.S. Dealers(15) - Section 3.1 does notapply to a salesperson, officer or partner that is not ordinarily resident in a jurisdiction if
(a) in the case of a salesperson, the salesperson is registered as a salesperson under the 1934 Act with abroker-dealer;
(b) in the case of an officer or partner, the officer or partner is an officer or partner of a broker-dealer;
(c) the salesperson, officer or partner is supervised both by the broker-dealer and by the Ontariosupervising dealer in respect of the dealings of the salesperson, officer or partner with customersordinarily resident in Ontario, and the broker-dealer and the Ontario supervising dealer have enteredinto a written agreement regarding supervision; and
(d) all trading activity with customers ordinarily resident in Ontario is done on behalf of the Ontariosupervising dealer.
PART 4 SUBMISSION TO JURISDICTION BY NON-RESIDENTS OF ONTARIO
4.1 Submission to Jurisdiction - An applicant that does not have a place of business in Ontario and thatapplies for registration as a dealer or adviser, or that is not ordinarily resident in Ontario and that appliesfor registration as a salesperson, officer or partner of a registered dealer or adviser, shall file as part of his,her or its application for registration an executed submission to jurisdiction and appointment of agent forservice of process form.
4.2 Disclosure of Agent for Service of Process - A registrant that has filed an executed submission tojurisdiction and appointment of agent for service of process form shall disclose the name and address ofthe registrant's agent for service of process in Ontario
(a) if the registrant is a dealer, in each prospectus, registration statement, offering memorandum(16) orother similar document relating to an offering in which the dealer is acting as underwriter; and
(b) in writing to each client of the registrant in Ontario.
PART 5 EXEMPTION
5.1 Exemption - The Director may grant an exemption to this Rule, in whole or in part, subject to suchconditions or restrictions as may be imposed in the exemption.
REGISTRATION OF NON-RESIDENTS
APPENDIX A
FORM OF SUBMISSION TO JURISDICTION AND APPOINTMENT OF AGENT
FOR SERVICE OF PROCESS BY NON-RESIDENT DEALER OR ADVISER
1. Name of the applicant (the "Applicant"):
2. Jurisdiction of incorporation or organization of the Applicant:
3. Name of agent for service of process (the "Agent"):
4. Address for service of process of the Agent in Ontario:
5. The Applicant designates and appoints the Agent at the address stated above as its agent upon whom maybe served any notice, pleading, subpoena, summons or other process in any action, investigation oradministrative, criminal, quasi-criminal, penal or other proceeding (each, a "Proceeding") arising out of orrelating to or concerning the Applicant's activities as a dealer in Ontario, and irrevocably waives any right toraise as defence in any Proceeding any alleged lack of jurisdiction to bring that Proceeding.
6. The Applicant irrevocably and unconditionally submits to the non-exclusive jurisdiction of the judicial, quasi-judicial and administrative tribunals of Ontario and any administrative proceeding in Ontario, in anyProceeding arising out of or related to or concerning the Applicant's activities as a dealer or adviser inOntario.
7. Until six years after the Applicant ceases to be registered as a dealer or adviser in Ontario, the Applicant shallfile
(a) a new Submission to Jurisdiction and Appointment of Agent for Service of Process in this form atleast 30 days before termination for any reason of this Submission to Jurisdiction andAppointment of Agent for Service of Process and immediately after the death or incapacity of theAgent or the Agent ceasing to carry on business; and
(b) an amended Submission to Jurisdiction and Appointment of Agent for Service of Process at least30 days before any change in the name or address of the Agent from that set forth above.
8. This Submission to Jurisdiction and Appointment of Agent for Service of Process is governed by andconstrued in accordance with the laws of Ontario.
Dated:
[Name of Applicant]
By:
(Signature of authorized signatory)
(Name and title of authorized
signatory)
The undersigned accepts the appointment as agent for service of process of (Insertname of Applicant) under the terms and conditions of the foregoing Submission to Jurisdiction and Appointment ofAgent for Service of Process and agrees to deliver to the Ontario Securities Commission (the "Commission") a copyof each document served on the undersigned as agent for service of process of the Applicant, within five days of thedate the document was served on the undersigned, and to advise the Commission immediately if the undersigned isunable to deliver to the Applicant a copy of a document served on the undersigned as Agent.
Dated:
(Signature of Agent or authorized signatory)
(Name and Title of Authorized Signatory)
REGISTRATION OF NON-RESIDENTS
APPENDIX B
FORM OF SUBMISSION TO JURISDICTION AND APPOINTMENT OF AGENT
FOR SERVICE OF PROCESS BY NON-RESIDENT SALESPERSONS,
OFFICERS OR PARTNERS OF DEALERS OR ADVISERS
1. Name of the dealer or adviser (the "Registrant"):
2. Jurisdiction of incorporation or organization of the Registrant:
3. Name and address of person filing this form (the "Filing Person"):
4. Name of agent for service of process (the "Agent"):
5. Address for service of process of the Agent in Ontario:
6. The Filing Person designates and appoints the Agent at the address of the Agent stated above as its agentupon whom may be served a notice, pleading, subpoena, summons or other process in any action,investigation or administrative, criminal, quasi-criminal, penal or other proceeding (each, a "Proceeding")arising out of or relating to or concerning the Filing Person's activities in Ontario as a registrant under theSecurities Act (Ontario) (the "Act"), and irrevocably waives any right to raise as a defence in any Proceedingany alleged lack of jurisdiction to bring that Proceeding.
7. The Filing Person irrevocably and unconditionally submits to the non-exclusive jurisdiction of the judicial,quasi-judicial and administrative tribunals of Ontario and any administrative proceeding in Ontario, in anyProceeding arising out of or related to or concerning the Filing Person's activities in Ontario as a registrantunder the Act.
8. Until the earlier of the termination of the Filing Person's position as a salesperson, officer or partner of theRegistrant and six years after the Registrant ceases to be a registrant under the Act, the Filing Person shallfile
(a) a new Submission to Jurisdiction and Appointment of Agent for Service of Process in this form atleast 30 days prior to termination for any reason of this Submission to Jurisdiction andAppointment of Agent for Service of Process and immediately after the death or incapacity of theAgent or the Agent ceasing to carry on business; and
(b) an amended Submission to Jurisdiction and Appointment of Agent for Service of Process at least30 days before any change in the name or address of the Agent as set forth above.
9. This Submission to Jurisdiction and Appointment of Agent for Service of Process is governed by andconstrued in accordance with the laws of Ontario.
Dated:
(Signature of Filing Person)
(Name of Filing Person)
The undersigned accepts the appointment as agent for service of process of (Insertname of Filing Person) pursuant to the terms and conditions of the foregoing Submission to Jurisdiction andAppointment of Agent for Service of Process and acknowledges agrees to deliver to the Ontario SecuritiesCommission (the "Commission") a copy of each document served on the undersigned as agent for service ofprocess of the Filing Person, within five days of the date the document was served on the undersigned, and toadvise the Commission immediately if the undersigned is unable to deliver to the Filing Person a copy of adocument served on the undersigned as Agent.
Dated:
(Signature of Agent or authorized signatory)
(Name and title of authorized signatory)
Footnotes
1. This proposed Rule is based on OSC Policy Statement No. 4.7 ("Policy 4.7"), as well as the Staff Notice of Change in AdministrativePractice Regarding Registration Residency Requirements for Certain Canadian Resident Dealers (1995), 18 OSCB 3908 and the StaffNotice of Change in Administrative Policy Regarding Residency Requirements for Certain Non-Resident Salespersons and Supervisors(1995), 18 OSCB 3905.
2. A general definition rule has been adopted as Rule 14-501 Definitions ("Rule 14-501") . It contains definitions of certain terms used inmore than one rule. Rule 14-501 also provides, among other things, that terms used in a rule and defined in section 1 of the Securities Actor subsection 1(2) of the Regulation will have the respective meaning given to them in the Securities Act or Regulation, as appropriate.Rule 14-501 also incorporates terms defined in National Instrument 14-101 Definitions ("NI14-101"). NI14-101 contains, among otherthings, definitions for terms used in more than one national instrument.
3. The term "1934 Act" is defined in NI14-101 as meaning "the Securities Exchange Act of 1934 of the United States of America". The term "international dealer" is defined in Rule 14-501 as meaning "a person or company that is registered under the Act in the categoryof international dealer".
5. The term "broker" is defined in Rule 14-501 as meaning "a person or company that is registered under the Act in the category of broker".
6. The term "investment dealer" is defined in Rule 14-501 as meaning "a person or company that is registered under the Act in the category ofinvestment dealer".
7. The term "limited market dealer" is defined in Rule 14-501 as meaning "a person or company that is registered under the Act in thecategory of limited market dealer".
8. The term "security issuer" is defined in Rule 14-501 as meaning "an issuer that is registered under the Act in the category of securityissuer".
9. The term "jurisdiction" is defined in NI14-101 as meaning "a province or territory of Canada except when used in the term foreignjurisdiction".
10. This section replaces the first Staff Notice referred to in note 1. The requirement to inform the Commission of changes in the registrant'sregistration status is another jurisdiction has not been included in this Rule because an equivalent requirement is anticipated to be imposedby proposed Rule 33-503 Change of Registration Information, which is expected to be published for comment shortly.
11. The term "SRO" is defined in NI14-101 as meaning "a self-regulatory organization, a self-regulatory body or an exchange".
12. Section 26 of the Act requires that in the opinion of the Director the applicant be suitable for registration and the registration not beobjectionable.
13. The term "Canadian securities legislation" is defined in NI14-101 as meaning the statutes and other legislative instruments set out in anappendix to that instrument and will generally include the statute, regulations and, in some cases, rules, forms, rulings and orders relatingto securities.
14. This paragraph reformulates Policy 4.7.
15. This section, together with Part 4, replaces the second Staff Notice referred to in note 1.
16. The Commission published for comment in April, 1998 proposed amendments to Rule 14-501 at (1998) 21 O.S.C.B. 2341. Among otherthings, this proposed amendment would amend Rule 14-501 to revise the definition of the term "offering memorandum". The definitionwould be "a document purporting to describe the business and affairs of an issuer that has been prepared primarily for delivery to andreview by a prospective purchaser so as to assist the prospective purchaser to make an investment decision for a security being sold in adistribution to which section 53 of the Act would apply but for the availability of one or more of the exemptions contained in Ontariosecurities law but does not include a document setting out current information about an issuer for the benefit of a prospective purchaserfamiliar with the issuer through prior investment or business contacts".